McCain says economy in crisis

September 22, 2008 5:50:13 PM PDT

SCRANTON --

Republican John McCain on Monday called for greater oversight of the Bush administration's proposed bailout of U.S. financial markets, saying the massive $700 billion plan being crafted by Treasury Secretary Henry Paulson needed broader supervision. "Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable," the presidential candidate said at a rally here. "We will not solve a problem caused by poor oversight with a plan that has no oversight."

McCain praised Paulson and said he had spoken to him several times over the weekend. But the GOP presidential hopeful nonetheless called for a bipartisan oversight board to supervise the proposed bailout, to be led by Warren Buffett or another widely respected business leader.

McCain suggested his one-time rival for the GOP nomination, former Massachusetts Gov. Mitt Romney, and New York Mayor Michael Bloomberg be part of the effort as well. Both men made multimillion-dollar fortunes in business before entering politics.

Earlier, McCain, who just a week ago said the economy was fundamentally sound, said he believed the U.S. financial system is facing a major crisis.

Speaking on NBC's "Today" show, McCain said, "We are in the most serious crisis since World War II."

He also said that despite the ballooning national debt he would not raise taxes if elected president. "History shows us that if you raise people's taxes in tough economic times that makes problems worse," McCain said.

The Arizona senator also called on Congress to move quickly and work with the Bush administration to restore stability to the troubled financial sector. But he said the goal of any action must be to allow homeowners to stay in their homes and prevent Wall Street executives from profiting from a taxpayer bailout.

McCain's comments came at a raucous meeting with an Irish-American group in Scranton, a working-class city in northeastern Pennsylvania that has been a hub of campaign activity and rhetoric throughout the year.

Democratic vice presidential contender Joe Biden hails from Scranton and on the campaign trail often speaks of his blue-collar roots here.

Before last spring's Pennsylvania primary, Democratic Sen. Hillary Rodham Clinton also laid claim to the town, where her father grew up and is buried. Clinton defeated Barack Obama by 10 percentage points, in part due to her strong showing among white working-class voters in the state.

At the rally, McCain was introduced by the state's Republican senator, Arlen Specter, who praised Obama as an "able fellow" who nonetheless lacked McCain's years of experience in Washington.

McCain also took a few friendly questions from the audience, including one from a woman who asked why news organizations had committed so many investigative reporters to look into the background of Alaska Gov. Sarah Palin, McCain's running mate.

"Shame on you, shame on you," the woman shouted at the assembled reporters to applause, while McCain looked on approvingly.

"That is a great question," McCain said. "One thing I want to assure you of is that Governor Palin - she can take it."

The anti-media rant continued on a conference call later with McCain campaign manager Rick Davis and Steve Schmidt, who manages day-to-day operations and strategy. Schmidt criticized what he called a "compliant media" that he argued hadn't sufficiently investigated Obama's background and campaign claims, and singled out The New York Times, which he called a "pro-Obama advocacy organization."

"It is an organization that is 150 percent in the tank for the Democratic candidate," Schmidt complained.

In response, Bill Keller, executive editor of the Times, said the newspaper "is committed to covering the candidates fully, fairly and aggressively. It's our job to ask hard questions, fact-check their statements and their advertising, examine their programs, positions, biographies and advisers. Candidates and their campaign operatives are not always comfortable with that level of scrutiny, but it's what our readers expect and deserve."